EIB steps up its support for climate action, knowledge economy and SMEs in Greece

The European Investment Bank provides a total of EUR 370 million for climate action and knowledge economy in Greece:

EUR 130 million go to the Greek Public Power Corporation (PPC) for promoting energy security and efficiency in Greece. The EIB funds are destined for the new Megalopolis natural gas-fired, combined cycle power plant in the central Peloponnese. The investment will add state-of-the-art, environment-friendly energy production in the country. This is a follow up loan for the Megalopolis power plant, bringing total EIB finance for this investment to date to EUR 280 million.

EUR 100 million are for the School Building Organisation (SBO) in support of school facilities throughout Greece. This is the second and last part of a total EUR 200 million facility. The first EUR 100 million was signed in October 2010. The loan aims at upgrading schooling facilities throughout Greece over the next three years. It concerns the construction and renovation of 84 schools and 31 multi-purpose school halls, as well as equipment for some 14,000 public schools. Increasing physical capacity and improving the quality of the school estate are key aims of the Greek education policy.

EUR 140 million have been signed with Alpha Bank S.A (ALPHA BANK) in favour of small and medium sized enterprises (SMEs) and mid-sized companies (mid-caps) in Greece. SMEs and mid-cap businesses play a key role in the Greek economy. The EIB loan in tandem with ALPHA BANK will support investments in tangible assets, as well as working capital. Investment will be for new projects or the modernisation/expansion of existing businesses, mainly in the fields of manufacturing, services and tourism, as well as in small to medium infrastructure projects SMEs and mid-caps can benefit from this operation for projects below EUR 25 million.

EIB Vice-PresidentDario Scannapieco, whose responsibilities include the EIB’s lending activities in Greece, stated: “We are committed to supporting Greece. The new loans of a total of EUR 370 million signed for energy, schools and SMEs in Greece, contribute to the development of the key areas in Greece, and at the same time form a firm step towards economic recovery. In Greece we focus on economic and social infrastructure, as well as SMEs.The success of the Greek recovery is inextricably linked to small businesses. We will act boldly to lift SMEs out of crisis. Our action is amplified by the synergy with our partner banks in Greece, among which ALPHA BANK. Now is the time to work together to restore the growth that can only come from viable infrastructure and dynamic enterprises that harness innovation and advance opportunity”

In recent years in Greece, EIB financing in the energy sector has been directed towards securing sustainable energy supplies, reducing the burden on the environment and promoting the development of new sustainable energy sources. Signiﬁcant projects in this sector include support for: (i) the Public Power Corporation’s new Aliveri natural gas-fired, combined cycle power plant on the island of Evia, and network modernisation involving several schemes to reinforce and extend electricity transmission and distribution networks throughout the country; (ii) the Greek Natural Gas Company’s priority Trans-European Network schemes, notably investments in the liquefied natural gas (LNG) terminal at Revithoussa, which has increased capacity and enhanced overall security of supply; (iii) the construction of the high pressure gas pipeline connecting Komotini with Alexandroupolis and the Turkish natural gas network on the Greek-Turkish border; and (iv) renewable energy generation through the construction of wind farms to generate renewable energy, thus promoting EU and national policy on renewable energy and climate change.

In education infrastructure total EIB financing amounts to date to EUR 800 million. A first loan of EUR 400 million was signed with the SBO in 2001 for investments located mainly in Attica and aimed at phasing out two-shift schooling. A second loan of EUR 200 million was signed in 2006 for investments throughout the country. The facility of EUR 200 million signed in 2010 and now, covers also all regions of the country. These operations have been mounted with the SBO, which has been largely responsible for the development of school facilities in Greece since 1962. The SBO, which has been transformed into a private company with the Greek State as its sole shareholder in 1998, is experienced and well regarded, having attracted favourable publicity in the Journal of the OECD Programme on Educational Buildings for its ability to contribute to the protection of Greece’s cultural heritage with its design and construction of new school buildings.

Small and mid-cap businesses play a key role in the Greek economy. SME support in Greece has therefore been a major EIB objective over the past five years, with facilities amounting to some EUR 1.5 billion in partnership with all major Greek banks. The EIB has always supported SMEs. In the last years, however, a "new formula" has been deployed in response to the current financial and economic crisis. This formula facilitates SMEs in gaining access to credit by increasing flexibility, simplifying procedures, and - in return - requiring greater transparency from partner banks, which must clearly inform their customers of the way in which the EIB funds improve their lending terms; longer maturities, more flexible disbursement conditions and lower interest rates.

Background notes:

The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.